“The current administration has suffered from a historic lack of private-sector experience, from Obama on down. There’s almost no one on the White House payroll who’s actually ever had to meet a payroll,” Ed Carson of Investor’s Business Daily wrote in 2010. Similarly, it seems safe to guesstimate that comparatively few journalists on the left have been self-employed in other professions before entering their current field. That can lead to confusion as to how small business and taxation works.
Or as Twitter user Chuck Peters writes today, “So basically Obama & Huff were geared up to make fun of Matt Drudge & then they realized they were wrong halfway through their propaganda.”
On Friday, Matthew Boyle wrote at Big Government, a section of the sprawling Website founded by the late Andrew Breitbart, who began his career in journalism as an associate of Drudge, “‘Liberty Tax’: White House, Media Attack After Drudge Pays Obamacare Opt-Out Penalty”:
A White House aide set off a stampede of liberal media criticism for Internet news pioneer Matt Drudge over Obamacare – but his critics don’t seem to understand how small businesses pay taxes.
The brouhaha started when Drudge tweeted, “Just paid the Obamacare penalty for not ‘getting covered’… I’M CALLING IT A LIBERTY TAX.”
Jesse Lee, the Director of Progressive Media at Barack Obama’s White House, responded that that was a “Flat lie, no fee for previous year,” adding, “Scary how much influence he once had.”
Lee’s response to Drudge set off a firestorm in the liberal media, with many mainstream media and left-wing reporters countering him on Twitter and in their own articles to claim he does not have to pay Obamacare’s Individual Mandate tax until next year. The individual mandate went into effect Jan. 1 of this year, and most people paying their taxes right now are paying taxes for 2013.
“Dude, there’s no penalty until next yr,” Sahil Kapur of the leftwing Talking Points Memo tweeted.
Kapur’s colleague at TPM Dylan Scott wrote a full story with a headline alleging Drudge was “probably lying.”
Welcome to the world of quarterly payments for the 1040 Schedule C Self-Employment Tax. At the Washington Times, Kellan Howell writes, “Media wrongly attack Drudge after he admits paying Obamacare penalty”:
A similar story appeared in Huffington Post, in which the author, Jeffrey Young, wrote Mr. Drudge’s tweet was “weird” and a “little head-scratching.”
What each critical tweeter and pundit failed to realize was that Mr. Drudge, as the self-employed proprietor of The Drudge Report, files taxes as a small business on a quarterly basis.
The IRS requires self-employed business owners to file annual returns and pay estimated quarterly taxes. When entrepreneurs like Mr. Drudge file their 2014 first quarter taxes, they have to pay the individual health care mandate if they are not getting Obamacare coverage.
The IRS form also allows adding the mandate to the section labeled “other taxes,” hence Mr. Drudge’s chosen name “Liberty tax.”
A Senate Budget Committee aide told Breitbart News, “It is true that thousands of small businesses will be forces to pay Obamacare taxes quarterly in 2014.”
Breitbart reported that Mr. Drudge did respond to the ill-informed critics, tweeting, “Dazed team Obama media reporters think Opt-Out tax ‘year-away’? Not for small businesses that file Qtr estimates. We’re there NOW, baby #pay.”
“Hey, WH, libs and lapdogs! Matt Drudge: This IRS form recommends paying ‘Obamacare tax NOW,” Twitchy notes, adding, “Looky here”:
As with many on the left, Barack Obama has demonstrated his loathing of self-employment and entrepreneurship with his infamous “You didn’t build that” Kinsley-esque gaffe in the summer of 2012. In late October of last year, Democrat Jennifer Granholm lamely quipped on Meet the Press that Obama was so mad over the botched Obamacare rollout that “he himself would go down and supervise the writing of code if this is not fixed by the end of November.” Other than Granholm perhaps, no one expects the president to be writing his own computer code, but one would have expected his acolytes to have some idea of how the tax code worked. (When it’s not being used as a weapon against the president’s enemies, that is.)